The following is a summary of the Hillenbrand, Inc. (HI) Q2 2024 Earnings Call Transcript:
Financial Performance:
Hillenbrand reported a total revenue growth of 14%, driven by the acquisition of Schenck Process Food and Performance Materials.
Adjusted earnings per share was $0.76, which was in line with expectations.
Revenue of $785 million was reported in Q2 2024, increasing by 14% compared to the prior year due to the FPM acquisition.
The GAAP net income fell to $6 million or $0.09 per share, down $0.24 from the previous year, impacted by the acquisition cost of FPM, cost inflation, lower organic volume, and higher interest expense.
Cash flow from operations decreased, down $47 million from the previous year due to timing of working capital requirements and lower customer advances.
Business Progress:
Despite the challenging global macroeconomic environment impacting demand, Hillenbrand has seen improvement in its Advanced Process Solutions segment and the Molding Technology Segment.
Cost actions implemented during the quarter have resulted in a 100 basis point adjustment to the EBITDA margin expansion.
Hillenbrand is on track with its operating model integration of FPM and Linxis and is ahead of schedule on improving the profit margin of these businesses.
Demand recovery has been noted, with orders improving over 10%, particularly in North America's automotive and packaging applications.
They remain committed to debt reduction and have been implementing capital optimization initiatives and cost controls despite order delays pressuring their short-term financials.
Although free cash flow has remained weak due to earnings and advances related to the timing of orders, expected improvement in trade AR, trade AP, and inventory is part of current efforts to manage fundamentals.
The company anticipates $8 million in benefits from restructuring in 2024, with the full expected run rate in 2025 and small targeted charges are being implemented to adjust for near-term order pressure.
Hillenbrand's pipelines are growing due to active discussions without any cancellations on orders and the team continues to prepare globally for future demand signals.
More details: Hillenbrand IR
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